More than 60% U.S. dairies signed up for Dairy Margin Coverage

Nearly 17,000 dairy operations have signed up for the Dairy Margin Coverage program since signup opened June 17. Producers interested in 2019 coverage must sign up before Sept. 20, 2019.

DMC offers protection to dairy producers when the difference between the all-milk price and the average feed cost (the margin) falls below a certain dollar amount selected by the producer.

“We’re encouraged by the number of dairy producers who have signed up for this new program, but we are hopeful that we will get more folks in the door,” said Bill Northey, USDA’s Under Secretary for Farm Production and Conservation. “At this point in the signup process, we are well ahead of the number of producers covered at this time last year under the previous safety net program, with more producers enrolling every day. As we move into the homestretch, we expect more producers across the country to get coverage through DMC and our team at FSA is really going above and beyond to make sure we get the word out there, the returns this year to-date should speak for themselves.”

House Agriculture Committee Chairman, Rep. Collin Peterson, D-Minn., emphasized at Farmfest in early August that the Dairy Margin Coverage program is a new dairy program. He also encouraged producers to signup for the program.

“We only have 61% of dairy farmers in Minnesota signed up for the new dairy program,” he said. “For the life of me, I can’t figure out why that’s not 100% because it’s a no-brainer.”

It’s a no-brainer because the retroactive coverage through January has already assured farmers that their 2019 payments will exceed the required premiums, added Agriculture Secretary Sonny Perdue.

“We have now a guarantee of gross income for people that have 220 cows or less and if you’re in dairying and you’re not in this program and get in trouble, don’t come and talk to me because we’ve got the program there to help you make it through if we get into tough times,” Peterson said. His encouragement may have helped as the number of dairies signed up in Minnesota rose to 67% as of Aug. 19, according to USDA. Minnesota has the second highest number of dairies enrolled in DMC with 1,865. Wisconsin is the leader with 4,832 dairy operations. Rounding out the top five are New York (1,779), Pennsylvania (1,511) and Michigan (702).

Peterson said he’d prefer if the government didn’t pay anything to dairy farmers under DMC because that would mean farmers are making money, “but this gives us a safety net and that’s what we need.”

To date, more than 60% of dairies nationally with established production histories have enrolled in the program.

USDA’s Farm Service Agency began issuing program payments to producers on July 11. DMC provides coverage retroactive to Jan. 1, 2019. The producers who have signed up to date will receive more than $219.7 million in payments for January through June, when the income over feed cost margin was $8.63 per hundredweight (cwt.), triggering the sixth payment for eligible dairy producers who purchased the $9 and $9.50 levels of coverage under DMC.